Cash generated from council house rents in the 206 council housing organisations across England needs to be ploughed back into building more social housing rather than left to sit in a national pot waiting for redistribution, says the Federation of Master Builders (FMB).

Brian Berry, Director of External Affairs at the FMB said: "At a time when more than 4.5 million people are on council house waiting lists and house building is at its lowest level since 1924 it makes no sense for central government to sit on an estimated £200 million pot of money waiting for redistribution.


"It would be far better to allow local authorities to keep the cash generated from rents to build more homes in their own area. Such a move would benefit both those waiting for an affordable home and the house builders who are experiencing the worst recession in living memory."

Berry continued: "The Government should allow councils to operate in a similar way to housing associations who can borrow freely and keep the cash generated from rents to plough back into their businesses. The estimated £200 million surplus could deliver around 1,800 council houses which is a lot more than the £50 million extra for new council housing announced in the Chancellor's Budget in April."

(CD/JM)